Confusion surrounding the difference between long-term income protection (sometimes referred to as permanent health insurance) and short-term income protection has plagued the market for years. Now with new products pushing the boundaries of one camp or the other, it is sometimes difficult to know what the best options are.
Despite the constant clash between long-term and short-term income protection, there are circumstances when they can work in harmony. But first, let’s be clear about the difference between the two products. Short-term income protection replaces a person’s net monthly income (often up to 75%) if they are unable to work due to accident, sickness or unemployment. The benefit period is for a contractual ‘short’ period of time, typically 12 months, but some newer, more flexible providers also offer benefit cover for three and six months. Short-term income protection is not a complex produc...
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